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Is the Patrick Ho bribery trial politically motivated?

07 Feb 2018

Author: Robert Precht

Former Hong Kong senior official Patrick Ho, jailed in New York on bribery charges, was denied bail for a second time yesterday after judge Katherine Forrest ruled that he presented a flight risk. In denying bail, the judge questioned the argumentof Ho’s defense lawyer -- Edward Kim -- that Ho would not flee because doing so would ruin his reputation, which he prizes. She cited reports in Hong Kong and China that have suggested the case is politically motivated, which would immunize him from damage to his reputation in the city and country and which would complicate extradition.

Is the Ho prosecution politically motivated? If politics simply means trying to make China look bad, the answer is no. But if politics means protecting U.S. companies from unfair trade practices, then yes, the Ho case is politically motivated.

U.S. prosecutors allege that Ho made bribes to African officials to gain lucrative contracts for a Chinese conglomerate. That means putting American companies that do not engage in bribery at a competitive disadvantage. Indeed, in one of the intercepted emails, Ho is told by an accomplice that he needs to act quickly to make bribes because if he doesn’t he will lose the contracts to “aggressive American and Australian businessmen.”

As noted in the FCPA Blog, the DOJ-SEC Resource Guidesays creating a level playing field for American companies doing business overseas is a core aspect of FCPA enforcement policy. And in the press release about Ho's arrest, Acting Assistant Attorney General Ken Blanco said the DOJ is "committed to investigating and prosecuting corrupt individuals who put at risk a level playing field for corporate competitiveness, regardless of where they live or work. Their bribes and corrupt acts hurt our economy ….” (emphasis added).

Another indication that the FCPA is a political tool is the statute’s extraterritorial features. U.S. authorities can prosecute foreign individuals and companies who never set foot in the country so long as there is any connection or nexus -- however slight -- to the U.S., for example sending an email that passes through U.S. internet servers. In effect, the U.S. is using its criminal enforcement power to punish conduct abroad that might not even be illegal in other countries. Proponents say forcing the United States to abandon extraterritorial prosecutions would harm the fight against global corruption. Critics point out that such prosecutions make the law the servant of political ends, in this case discouraging the widespread practice of Chinese companies making bribes to foreign officials.

I do not agree with the judge’s decision denying bail to Ho (he has no previous criminal record, he hasn’t been charged with a violent crime, and he has offered to put up U.S $10 million in bond). At the same time I do think the case is politically motivated. And this factor might protect him from disgrace were he to flee.